Bitcoin Faces Rejection at Short-Term Holder Cost Basis
Bitcoin has failed in its latest attempt to retest a significant metric, indicating a potential bearish trend. The short-term holder’s realized price, which represents the average investor’s acquisition cost, is currently acting as resistance for BTC.
When the spot price of Bitcoin falls below this level, it indicates that investors are experiencing a net loss. Conversely, if the price surpasses this metric, it suggests that the market as a whole is holding profits.
Focus on Short-Term Holders
In this analysis, the realized price of the entire Bitcoin sector is not relevant. Instead, it specifically considers short-term holders (STHs) who acquired their coins within the past 155 days. STHs are often reactive to market changes due to their weaker conviction.
Importance of the Retest
A chart reveals that Bitcoin’s realized price for STHs had previously acted as a support level during retests in March and June. However, after slipping below this line following the crash in August, Bitcoin has been unable to recover above it.
The latest retest of this indicator was crucial, and its failure may indicate a shift back towards a bearish trend.
Bitcoin Price Confirmation
Although retests like this can take time to conclude, Bitcoin’s steep decline to around $26,700 since the rejection suggests that it was indeed rejected this time.
Hot Take: Bitcoin’s Rejection Raises Concerns for Bearish Trend
The recent failure of Bitcoin to retest the short-term holder’s realized price is a worrying sign for the asset. It suggests that a shift back towards a bearish trend may have occurred. This rejection indicates that investors are currently experiencing a net loss, and the market as a whole may not be holding profits. The significance of this metric cannot be overlooked, and its failure in the latest retest emphasizes the potential bearish outlook for Bitcoin. The steep decline in BTC price following the rejection provides further confirmation of this bearish sentiment. Investors should closely monitor Bitcoin’s performance in the coming days to determine if this rejection will lead to a sustained downward trend.
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